A month has gone by since the last earnings report for Integra LifeSciences Holdings Corporation IART . Shares have added about 3.6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is IART due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Integra LifeSciences Holdings reported adjusted earnings per share (EPS) of 64 cents in the fourth quarter of 2017, up 23.1% from the year-ago figure.
Adjusted EPS surpassed the Zacks Consensus Estimate of 57 cents by 12.2%.
Full-year adjusted earnings came in at $1.94, reflecting increase of 10.23% from the year-ago quarter. Full-year adjusted EPS also surpassed the Zacks Consensus Estimate of $1.86 by 4.3%.
Total revenues in the reported quarter increased 44.2% year over year to $368.6 million, which surpassed the Zacks Consensus Estimate of $364.9 million. Excluding revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues rose 5.8% year over year.
Full-year revenues came in at $1.19 billion, reflecting an increase of 19.8%. The figure also surpassed the Zacks Consensus Estimate of $1.17 billion.
The solid revenue growth was primarily driven by high organic revenues and better-than-expected performance by both the recently-acquired businesses - Johnson & Johnson Codman Neurosurgery business and Derma Sciences.
Coming to product categories, revenues from the company's Codman Specialty Surgical segment increased 46.2% to $239.4 million.
Orthopedics and Tissue Technologies revenues came in at $129.2 million in the fourth quarter, up 40.6% year over year.
Adjusted gross margin contracted 679 basis points (bps) to 59.8% in the reported quarter. Selling, general and administrative expenses increased 70% to $190.6 million in the reported quarter, while research and development expenses rose 23.6% to $17.2 million. Accordingly, adjusted operating margin saw a 1388-bps contraction to 3.4% in the fourth quarter.
Integra LifeSciences exited 2017 with cash and cash equivalents of $174.9 million, up from $102.1 million recorded at the end of 2016. Full-year 2017 cash flow from operating activities was $114.5 million, down from $116.4 million in the year-ago period.
The company now expects full-year 2018 revenue guidance at the high end of the range of $1.46-$1.48 billion, on the back of more favorable foreign currency rates. The Zacks Consensus Estimate for full-year 2018 revenues is $1.48 billion, at the high end of the guided range.
The company expects adjusted earnings per diluted share to be at the high end of its previously provided range of $2.25-$2.35. The Zacks Consensus Estimate for 2018 adjusted earnings is pegged at $2.30, within the company's guided range.
For full-year 2018, the company reiterated adjusted gross margin at the band of 68% to 69%.
For the first quarter of 2018, the company expects adjusted EPS in the range of 48 - 51 cents, representing about 25% growth year over year. The Zacks Consensus Estimate for first-quarter 2018 adjusted EPS is pegged at 50 cents, within the company's guided range.
For the first quarter of 2018, the company expects total revenues in the range of $347-$352 million, which includes about 2% organic growth. The Zacks Consensus Estimate is $351.4 million, within the guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
Integra LifeSciences Holdings Corporation Price and Consensus
Integra LifeSciences Holdings Corporation Price and Consensus | Integra LifeSciences Holdings Corporation Quote
At this time, IART has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, IART has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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